E201 First Exam Graf

increase; decrease

A decrease in the price of bread, a complement in production of wheat bran, will ______ the equilibrium price of wheat bran and ____________ the equilibrium quantity of wheat bran.

the price changes but all other influences on producers' planned sales remain the same

Along the supply curve

10% points

Amber normally spends 5 nights studying for her economics test and her current grade int he course is 60%. She decides to spend 6 nights studying for her next economics test and her grade after that test rises to 70%. The marginal benefit to Amber of studying one more night for her economics test is

increase; fall

An advance in technology lowers the price of a laptop. If the demand for laptops is price inelastic, the quantity of laptops sold will ______ and total revenue will _________.

it produces the quantity on the PPF that is valued most highly

An economy produces snowboards. If the economy achieves allocative efficiency _______.

experiences an increase in its standard of living but does not overcome scarcity

An economy that uses technology ______.

rise; an increase

An increase in the demand for ski trips brings a _________ in the price of a ski trip and _________ in the quantity of ski trips supplied.

Elasticity

reported using its magnitude, is a ratio of two percentage changes, and is a units-free measure

Absolute advantage

a person who is more productive than others

income elasticity of demand formula

% change in QD/% change in income

Incentive

a reward that encourages an action or a penalty that discourages an action

you are making choices that are in your self-interest and possibility also in the social interest

When you make economics choices to purchase goods and services,

does not

A person who has an absolute advantage ________ have a comparative advantage in every activity

will increase

A printer is a normal good. If the population increases, you predict that the demand for printers ________.

Interest

Capital earns

decreases the amount that she spends on oranges

Cassandra's demand for orange juice is price elastic. A severe frost destroys much of the Florida orange crop. Cassandra ______.

Statements 1 and 2 are correct

Choose the correct statement or statements. 1. Testing an economic model is difficult because we observe the outcomes of the simultaneous 2. An economic model is tested by comparing its predictions with the facts. 3. An economic model is more complex than the economic world it describes. 4. Ignoring details in an economic model makes the model inadequate for prediction.

Statements 1 and 4 are correct

Choose the correct statements about competitive markets. 1. A single buyer in a competitive market cannot influence the price. 2. All competitive markets are physical places where buyers and sellers meet. 3. A competitive market is a market for services but not for goods. 4. A single seller in a competitive market cannot influence the price.

Statements 2 and 3 are correct

Choose the correct statements. 1. We measure the marginal benefit from a good or service by the most that people are willing to pay for all units they consume. 2. To describe preferences, economists use the concept of marginal benefit. 3. The marginal benefit from a good or service is the benefit received from consuming one more unit of it. 4. To describe preferences, economists use the concept of marginal cost.

Doug specializes in beef and Claire specializes in corn

Claire and Doug are farmers who produce beef and corn. Use the questions facts to answer the following question. In a year, Claire can produce 10 tons of beef or 30 bushels of corn. In a year, Doug can produce 30 tons of beef or 30 bushels of corn. To maximize their total output of beef and corn ________.

2 wraps; 2.5 wraps Elizabeth; Elizabeth

Elizabeth owns a take-out counter. In an hour she can produce 20 sandwiches or 40 wraps. Ben also owns a take-out counter. In an hour, he can produce 10 sandwiches or 25 wraps. Elizabeth's opportunity cost of 1 sandwich is ______. Ben's opportunity cost of 1 sandwich is ______. Who has a comparative advantage? Who has an absolute advantage in both goods?

Profit

Entrepreneurship

Macy's and Pizza Hut make decisions in their self-interest. Recycling is in the social interest, but people decide whether to make the effort to recycle in their self-interest

Explain how the following headlines concern​ self-interest and the social​ interest: 1. Macy's​, the New York department storet, is opening in Paris​, and Pizza Hut is expanding throughout Europe. 2. Liquor bottles must be recycled.

increase, and the demand curve for burgers will shift rightward

Hot dogs and burgers are substitutes. If the price of a hot dog increases, the demand for burgers will _____.

can predict; cannot predict

If demand and supply change in the same direction, we ________ the direction of change of the equilibrium quantity and we _______ the direction of change of the equilibrium price.

.4; inelastic

If the AQ of gasoline increases by 40% when the price of gasoline falls by 100%, what is the price elasticity of demand for gasoline? Based on the number you've calculated, the demand for gasoline is _____.

go to see more movies

If the price of going to the movie theater falls by a large​ amount, you have an incentive to​ _______.

the quantity of cell phones demanded decreases

If the price of a cell phone rises, with all other influences on buying plans remaining the same, in the market forcell phones ________.

rises; might increase, decrease, or stay the same

If the supply of spring water decreases and the same time the demand for spring water increases, the equilibrium price ______ and the equilibrium quantity ________.

Wages

Labor earns

Rent

Land earns

bottled water is a normal good

Maria graduates from college and her income increases by $20,000 a year. Nothing else changes. Maria decreases the quantity of T-shirts and bread rolls that she buys and increases the quantity of bottled water that she buys. For Maria, __________.

negative

Ski trips and ski jackets are complements. The cross elasticity of demand for ski trips with respect to the price of a ski jacket is _______.

making a choice at the margin

Sophia wants to study economics tonight and also to visit her friend William. She thinks hard about how to allocate the evening between studying and visiting William and decides to spend the first 2 hours studying and then spend 4 hours visiting William. Sophia's decision is an example of __________.

elastic; elastic

The closer the substitutes for a good or service, the more ___________ is demand. The greater the proportion of income spend on a good, the more _________ is demand.

become more elastic, the longer the time since demand doubled

The demand for air travel between two cities doubles. The elasticity of the supply of air travel between these cities will _________.

profit

The income earned by Howard Schultz, head of Starbucks is called _______.

elastic

The longer the time that has elapsed since a price change, the more ______ is demand.

resources are not all equally productive in all activities

The marginal cost curve is upward sloping because

price of furniture will decrease the quantity of furniture demanded by 1.3

The price elasticity of demand for furniture is estimated at 1.3. This value means a 1% increase in the

the law of supply applies to vegetable oil, but some other influence on selling plans has decreased the supply of vegetable oil

We observed a rise int eh price of vegetable oil and a decrease in the quantity of vegetable oil that producers sell. The most likely explanation is that ______.

human capital

What does the quality of labor depend on?

capital; operating room instruments

What factors of production go together?

Decreasing marginal benefit

What is a universal feature of people's preferences?

Society faces scarcity

What is the fundamental fact of life from which all economic problems arise?

Why does the government spend more than it collects?

What would not be a microeconomics question?

inelastic; a normal

When Mohesha receives an increase in her paycheck from $1800 a month to $2200 a month, she increases the quantity of hot chocolate that she buys from 19 cups a month to 21 cups a month. Moshesha's demand for hot chocolate is income _________. For Mohesha, hot chocolate is ______ good.

a how; a what

When Nike decides to produce running shoes by using more labor and less capital, it is answering ______ question. When Sony decides to produce computers rather than DVD players, it is answering _______ question.

Tradeoff

When a gym club chooses to spend more on cardio equipment and less on free weights, it choice illustrates

a for whom

Whether Sony gets a larger profit or its workers get higher wages is _______ question.

As the price rises, the quantity demanded decreases while the quantity supplied increases

Which of the following correctly describes how price adjustments eliminate a shortage?

a decrease in the price of the resources used to produce the good

Which of the following shifts the supply curve rightward?

Options 2 and 3 are positive, and options 1 and 4 are normative

Which of the following statements are normative and which are positive? 1. The US should follow the Kyoto Protocol. 2. Hurricanes cause damage to the Gulf Coast every year. 3. On average, Americans have a greater body mass index than citizens from any other country in the world. 4. We ought to drive our cars less and take public transportation more.

demand curve for wheat shifting leftward

You notice the equilibrium price and quantity of wheat both decrease. This observation can be the result of the

$6100

You plan to go to school this summer. If you​ do, you​ won't be able to take your usual summer job that pays ​$5,000 for the summer. The cost of tuition is ​$1,000 and textbooks cost ​$100. You live with your​ family, which covers your living expenses of ​$1,800. What is your opportunity cost of going to school this​ summer?

income elastcity of demand

a measure of the responsiveness of the demand for a good or service to a change in income, other things remaining the same.

What

based on scarcity, if more of a particular item is produced, than less of something else will be produced during the same period with a given set of resources

an absolute but not a comparative advantage

both Mergatroid and the Geebocks produce only gizmos and widgets. It is possible for Mergatroid to have

consume at a point beyond their individual production possibilities frontiers

by specialization and trade, two individuals can

that individuals, businesses, governments, and entire societies make as they cope with scarcity

economics is the social science that studies the choices ______.

Price elasticity of demand

equal to the percentage change in QD divided by the percentage change in price, a units-free measure, a measure of the responsiveness of the QD of a good to a change in its price, when all other influences on buyers' plan remain the same

How

goods and services are produced by using productive resources (inputs) that economists call factors of production

Inefficient

inside the PPC

inferior good

negative

Efficient

on the PPC

Unattainable

outside the PPC

normal good, income elastic

positive and greater than 1

normal good, income inelastic

positive and less than 1

Comparative advantage

that person can perform the activity better than anyone else

Production Possibilities Curve

the combination of goods and services that can be produced efficiently

law of supply

the higher the price of a good, other things remaining the same, the greater is the quantity supplied

law of demand

the higher the price of a good, other things remaining the same, the smaller is the quantity demanded

milk is a necessity

when consumers' incomes increased 10%, the quantity of milk bought increased 5%. This result means

4.5

when the price of a meat pie rises by 20 percent, the quantity demanded of meat pies decreases by 90%. What is the price elasticity of demand for meat pies?

For Whom

who gets the goods and services depends on the incomes that people earn